But just down the street from the courthouse, at the White House, there’s another religious exemption showdown brewing.

A couple of weeks ago, President Barack Obama announced that he was going to sign an executive order that would bar federal contractors from discriminating against gay and transgender employees. It was the fulfillment of a promise the Obama made 5 years ago.

The president was hoping to take a different route – and had pushed for passage of the Employment Non-Discrimination Act (ENDA), which would have made it illegal under federal law to discriminate in the workplace based on real or perceived sexual orientation or gender identity. But ENDA has gone the same way as most legislation in Congress – nowhere.

According to Human Rights Campaign, nearly 90 percent of the Fortune 500 prohibit discrimination based on sexual orientation and almost 60 percent prohibit it based on gender identity. So what’s the hold-up with the executive order?

Turns out, there’s a question about whether it will include an exemption for religious groups. Religious organizations contract with the federal government to provide all sorts of services from overseas relief and development with USAID to prison programs for the Bureau of Prisons. And they are not happy. Faith-based groups don’t want to be told they can’t continue to discriminate in their hiring when it comes to government contracts.

A group of about 160 religious leaders and religious freedom advocates signed a letter to Obama asking him to include an exemption for faith-based groups in his pending executive order protecting LGBT government contract workers from discrimination. The letter reads:

“Many of these religious organizations maintain employee moral conduct standards along with their requirement that staff members agree with the organizations’ religious commitments. These organizations often are the best qualified applicants for federal contracts or subcontracts. It would be counterproductive to bar them from offering their services to the federal government simply because of their legally protected religious convictions; it would be wrong to require them to violate those legally protected convictions in order to be eligible to receive federal contracts.”

There is already language on the books allowing some religious exemptions in this area. Executive Order 11246 was amended by President George W. Bush in 2002 to permit religiously affiliated organizations contracting with the U.S. government to discriminate in hiring based on religion, but not on any other protected basis, such as race, color, sex or national origin.

On the other side, LGBT advocates warn that a broad exemption would set a dangerous precedent. Lambda Legal senior counsel Jennifer Pizer told Bloomberg that an exemption could “set a very damaging precedent.” Not only would it “permit discrimination,” she says, “it would be a broad message to the public that discrimination against LGBT people is not deserving of the same robust prohibition that is in place with respect to other kinds of discrimination.”

No surprise, politicians are also weighing in. Republican Sen. Orrin Hatch of Utah urged in an e-mailed statement that any order “must include the same religious protections” in the Senate-passed Employment Non-Discrimination Act, so that “one of our nation’s fundamental freedoms—religious freedom—is still upheld.”

What does the Hobby Lobby decision bode for some of these other questions about employers that might cite their religious beliefs to discriminate, say against gay or transgender people? Interestingly, the interpretation from some on the left is that things could have been a lot worse. Here’s how Slate put it:

“… as the Hobby Lobby ruling approached, gay rights advocates braced for the apocalypse. But on Monday morning, the apocalypse didn’t come. In fact, quite the opposite: In its ruling for Hobby Lobby, the court—in an opinion authored by arch-conservative Justice Samuel Alito—explicitly stated that RFRA (the Religious Freedom Restoration Act) could not be used as a “shield” to “cloak … discrimination in hiring” as a “religious practice to escape legal sanction.” RFRA doesn’t permit employers to break a law when there is a compelling government interest backing that regulation, and, according to Alito, the government “has a compelling interest in providing an equal opportunity to participate in the workforce.”

Meanwhile, the Department of Labor isn’t waiting for anyone’s permission to update its rules. On June 20, the not-always-known-to-be-feisty government agency’s Wage and Hour Division, announced it was changing the rules to extend the protections of the Family and Medical Leave Act to all eligible employees in legal same sex marriages regardless of where they live.

“The basic promise of the FMLA is that no one should have to choose between succeeding at work and being a loving family caregiver,” said Labor Secretary Thomas Perez said in a statement. “Under the proposed revisions, the FMLA will be applied to all families equally, enabling individuals in same-sex marriages to fully exercise their rights and fulfill their responsibilities to their families.”

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